The Federal Reserve continues to make it tough for real estate investment trusts (REITs).
After raising rates even more this week, investors dumped major REITs so much that a number of them tanked to new lows for the last 52 weeks. Almost anyone who purchased these for the dividend payments over the last year is now at a loss with the position.
Anticipating a drop in revenue and income has REIT analysts generally reducing price targets and downgrading names. Fund investors are looking at the effects of much higher rates on financing and at the slide in value of underlying properties. None of this adds up to higher prices for real estate investment trusts, so they’re sold.
AvalonBay Communities Inc. (NYSE: AVB) owns apartment complexes in New York, New Jersey, Washington, D.C. , California and the Pacific Northwest. The REIT pays a 3.72% dividend.
The Nov. 3 action takes AvalonBay below all of the previous October 2022 lows, setting a new low for the year. Trading below the downtrending 50-day and 200-day moving averages is not a bullish look.
Camden Property Trust (NYSE: CPT) buys, manages and develops multifamily apartment communities in places such as Las Vegas, Dallas, Houston and Atlanta. The company is paying a 3.26% dividend.
The price gapped down to a new low for the year and remains below the 50- and 200-day moving averages, both of which are trending downward. There’s a positive divergence on the relative strength indicator (RSI) below the price chart.
Equity Residential (NYSE: EQR) owns 310 apartment complexes in Southern California, San Francisco, Seattle, New York, Boston and Washington, D.C.
The REIT pays a dividend of 4.04%.
The price gapped down to $60 at the opening of trading on Nov. 3, then found buying interest and managed to close at $61.38. As with the other real estate investment trusts, Equity Residential trades in a downtrend, deeply below both significant moving averages.
Extra Space Storage Inc. (NYSE: EXR) is based in Salt Lake City and owns and operates self-storage properties in 41 states. The REIT pays a 3.79% dividend.
It’s a strongly negative start to November for the company with new 52-week lows clearly in place — and just when, by late October, Extra Space looked as if it might conquer the 50-day moving average. Note the very large red selling volume bars beneath the first two sessions of the month.
Public Storage (NYSE: PSA) is the largest owner of self-storage facilities in the country with 2,800 units in 39 states. This REIT is paying a dividend of 2.83%.
This is another one where the first two trading sessions in November completely reversed a mid- to late-October rally. The company this week hit a new 52-week low on heavy volume and now goes for less than its downtrending 50-day and 200-day moving averages.
See more on real estate investing from Benzinga:
Not investment advice. For educational purposes only.
Charts courtesy of StockCharts
Don't miss real-time alerts on your stocks - join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.